Public Bill Committee

[Mr. Roger Gale in the Chair]

Further written evidence to be reported to the House

H&R 10 Places for People Group

Clause 9 ordered to stand part of the Bill.

Schedule 2

Acquisition of Land

Iain Wright: I beg to move amendment No. 17, in schedule 2, on page 127, line 37, leave out from ‘agreement’ to end of line 38.
It is good to see you back in the Chair this morning Mr. Gale. Schedule 2 contains technical, but important, provisions that primarily apply the standards of compulsory purchase legislation, which apply in most cases of compulsory acquisitions.

Roger Gale: Order. The Minister has just indicated that he wants to refer to Schedule 2; he will obviously do so in the context of the Government amendment. I am perfectly happy to have a stand part debate running concurrently with the debate on the Government amendment if hon. Members would like to do so. [Hon. Members: “Yes.”] In that case, we will treat this as a stand part debate as well.

Iain Wright: Thank you for that guidance and clarification, Mr. Gale, and I apologise for any confusion caused to the Committee. I want to stress that these provisions are not new, as they are modelled on the provisions for the Urban Regeneration Agency. The legislation sets out what the agency must do before it compulsorily acquires land or new rights over land. The legislation applied by schedule 2 also provides the gateway to the compensation code, which specifies the manner in which the price paid for land is to be agreed and governed. That is an amalgamation of statutes and about 150 years of case law.
Schedule 2 ensures that the Homes and Communities Agency is subject to the same statutory procedure as most other bodies that have the power to compulsorily acquire land. The procedure includes appropriate safeguards, such as the opportunity to make representations, and allows public inquiries to be held. It also ensures that the usual additional safeguards that apply to commons, open spaces and allotments apply.
Schedule 2 allows private rights of way and the laying down of equipment to be extinguished on completion of a compulsory acquisition. That practical provision ensures that the agency will be able to use the land it acquires, free from any interference from private rights over that land. Again, it is not a new provision, but is modelled on an equivalent provision for the Urban Regeneration Agency.
Government amendment No. 17 is a simple, technical amendment that ensures the correct application of the Compulsory Purchase Act 1965. It allows the Act to apply to all acquisitions by agreement, so far is applicable, as is the position for the Urban Regeneration Agency. That is important because the Act is the gateway to the compensation code that I mentioned earlier, and therefore ensures that appropriate compensation will be paid.

Alistair Burt: Our interest in the amendment is technical, and we seek clarification, particularly of the wide powers that we are discussing. We note from the memorandum that the schedule and the powers are modelled on similar provisions for the Urban Regeneration Agency. We are entitled to ask precisely what that means, as the question comes up rather often. We want to know what is being changed and why. If the amendment is a straight lift from another provision, we should know. If, however, it is modelled on such a provision, something may be hidden behind that. The Homes and Communities Agency’s combined powers not only to acquire but to develop land could lead to a conflict of interest not present in the powers of the Urban Regeneration Agency.
That is a common theme in this set of provisions—the combination of the HCA’s powers make it incredibly powerful. We therefore require genuine clarification of the extent of those powers and, when we come on to other clauses, we will seek guidance as to how they will be used. The Minister may not have the answer at his fingertips, but how often have the powers been used? Are they used on a regular basis, have they been used many times, or are they available in theory but not necessarily used in practice?
There are three brief areas that I wish to explore. First, why and to what extent do the powers differ from those previously granted? Secondly, does the Minister acknowledge that the combination of powers available to the Homes and Communities Agency makes the use of those powers a cause of concern? Clarification of the way in which they will be used would be helpful. Thirdly, how often have those powers been used in the past, and how often does he expect them to be used in future?

Robert Syms: I would like to make a general point. The subject of compulsory purchase is a complex one, but we live in a country of owner-occupiers who tend to relate everything that happens in their area to the price of their house. We are sometimes parsimonious in compensating people affected by development, and we would meet less opposition to worthy schemes if we were a little more generous at the beginning in compensating people whose properties are subject to a compulsory purchase order. That could unlock certain projects and speed up their development. I am not an expert on the subject of compulsory purchase, but will the agency be constrained in what it can offer when it purchases a site? That probably relates more to another measure—the Planning Bill—that is being considered in Committee today. Is there a formula for such purchases? Is it fixed or can it made more generous to speed up a housing development and obtain the benefits?

Iain Wright: We have had a short and sweet debate on an interesting and important clause that deals with the subject of how we fulfil the agency’s regeneration objectives. The hon. Member for North-East Bedfordshire made a number of points and I hope to be able to answer all of them effectively. He asked to what extent the HCA’s powers are different from those of the Urban Regeneration Agency. They are more or less—I know that that is not a satisfactory phrase—modelled on the Urban Regeneration Agency’s objectives. The subject that I think that he is trying to tease out—and I am happy to have this debate—is the brownfield restriction. I believe that the hon. Gentleman and his party have tabled amendments to a later clause on the issue. The brownfield restriction applies to the URA’s objectives, but it is not proposed that it should apply to the HCA’s powers, because limiting its compulsory purchase powers purely to brownfield land would reduce its ability to deliver regeneration and housing where they are needed, regardless of where that is in England.
The Government’s policy is that brownfield land should be developed before greenfield land. That has been our policy for a number of years, and it has served us extremely well—something like 74 per cent. of all development is on brownfield land, and we would like that figure to increase. The point that the hon. Member for North-East Bedfordshire made about the agency’s compulsory purchase powers was made by the hon. Member for Poole, too. Importantly, we are not talking about a vacuum and the agency’s compulsory purchase powers can be exercised only within the usual statutory framework for compulsory purchase. The Secretary of State has to authorise any compulsory purchase orders made by the agency. We discussed in previous sittings the agency’s wide-ranging powers to achieve its objectives of securing the most appropriate housing, regeneration and development in England, and it will operate within that framework. The power that we are debating today can be referred back to the Secretary of State—again, that is extremely important.
The hon. Member for North-East Bedfordshire asked how the provision was modelled on previous provisions. As I said, it is not a straight lift. We are trying to modernise legislation—it is a question of the language used for drafting measures—and the provision was developed with modern drafting procedures. The objects of the agency are wider than those of the Urban Regeneration Agency, so the application of the powers will be slightly different. I hope that that reassures the hon. Gentleman . He asked how many times the powers had been be used. I do not have the precise numbers to hand, but I can write to him and other Committee members.
I can give the Committee examples of compulsory purchase order powers that have been used by English Partnerships that have worked very well. For example, in Gardiners Lane South in Basildon, a CPO was proposed to acquire under-used and ineffectively used land so that a comprehensive regeneration scheme could be delivered. In Liverpool—as capital of culture, it is on our minds at the moment—a CPO was utilised to acquire land necessary to facilitate the Kings Waterfront scheme, as well as land that will be used to construct and maintain a pedestrian bridge over an adjacent estate. Again in Liverpool, at the Lime Street gateway project, English Partnerships used CPO powers to provide the necessary regeneration. The area was regarded as being in need of regeneration because of vacancy, under-use and ineffective use, and the Gateway site is a prominent location that could be better used.
Again—and I am looking at my right hon. Friend the Member for Greenwich and Woolwich—in the Greenwich peninsula, EP has made a CPO under the terms of a legal agreement with development partners. There are therefore examples of ways in which the new Homes and Communities Agency could use CPO powers to exploit land that would not be developed by the private sector.

Alistair Burt: The Minister may need to write to the Committee to clarify this, but in the specific examples he mentioned in relation to Liverpool, how will the HCA’s powers dovetail with the pathfinder programme and the various powers given to it? Problems have arisen in Liverpool with the time scale for the acquisition of property, and some areas—specifically Anfield—that were intended to be developed quite quickly have, in fact, waited a long time for development. How will the HCA’s compulsory purchase powers work where there is an existing pathway programme?

Iain Wright: I should be happy to allow the hon. Gentleman to intervene again to clarify something. When he says the pathfinder programmes, does he mean urban renewal?

Alistair Burt: Yes, I do.

Iain Wright: The whole aim is that the agency should work in consultation with local authorities and relevant organisations on issues such as housing market renewal. We should not forget that the agency will have responsibility for that function. I would imagine that there will be a dovetailing of the things that the hon. Gentleman mentioned. The wider point about using CPOs to utilise under-developed land is an important one, and I hope that he would accept that regeneration vehicles need compulsory purchase powers to fulfil their objectives.

Alistair Burt: May I pick up on something the Minister has just said, because we may have missed something in last week’s announcement? Is he saying that it is proposed that responsibility for the housing market renewal initiative, which was criticised by a parliamentary Committee, should be taken away from the Department and given to the Homes and Communities Agency?

Iain Wright: Yes, that is certainly the intention, and I thought I made that clear in earlier sessions. I apologise if I did not do so.
I hope that I have answered all the questions that were asked. As I have said, these are important powers for regeneration vehicles, and they will be used within the statutory planning framework and with the direct consent of the Secretary of State. It is important that the agency has them so that it can fulfil its objectives, so I hope that the hon. Gentleman supports the amendment.

Amendment agreed to.

Schedule 2, as amended, agreed to.

Clause 10

Restrictions on disposal of land

Margaret Moran: I beg to move amendment No. 38, in clause 10, page 4, line 30, leave out from ‘may’ to end of line 31 and insert
‘dispose of land for less than the best consideration which can reasonably be obtained where it will further one or more of the objects of the agency as defined in section 2.’.

Roger Gale: With this it will be convenient to discuss the following amendments:
No. 63, in clause 10, page 4, line 31, at end insert
‘provided that the Secretary of State takes into account the wider benefit to the community where such disposal takes place’.
No. 108, in clause 10, page 4, line 31, at end insert—
(1A) “best consideration” means the best outcome secured in respect of the objectives of the HCA in respect of the land being disposed of.’.
No. 39, in clause 10, page 4, line 32, leave out lines 32 to 40.

Margaret Moran: I am very pleased to be here under your chairmanship, Mr. Gale. The purpose of the amendments is really to facilitate the HCA’s objectives. The Bill, as it currently stands, implies restrictions on the disposal of lands by the HCA for less than the best market price. In other words, the opportunities for the HCA to dispose of land that might be in the wider public interest are limited within the Bill. The purpose of this amendment is to give the HCA power to dispose of land at less than best consideration—a Treasury term, as we know, which in practice means highest market price. So the concept can be used to further the objectives of the HCA, as the Minister has repeatedly outlined. The objective of the HCA is not only to improve the supply and quality of housing in England and to secure regeneration of land or infrastructure but to support the regeneration and development of communities and their continued well-being; to meet the needs of people living in England. Now that is a very wide objective which requires wider powers of disposal than are currently outlined in this Bill. So by deleting and replacing the words
“may not dispose of land for less than the best consideration which can reasonably be obtained unless the Secretary of State consents”,
the need is removed for the HCA to gain special permission from the Secretary of State each time it seeks to dispose of land outwith the current requirements for best consideration. So amendment No. 38 removes from the Bill the exception basis, if you like, which means that there has to be specific permission from the Secretary of State.
Amendment No. 39 deletes subsections (2), (3) and (4), which contain conditions as to where land might be disposed of for less than best consideration—for example, where there is a grant of a term of less than seven years or where the HCA has compulsorily acquired land. The amendment would make the clause a positive rather than a negative one—that is, it would enable the HCA to dispose of land in pursuance of its objects. The restrictions would no longer be needed.
The register of surplus public sector land contains about £10 billion-worth of land—about 4,500 hectares—and that includes a mix of local authority, central Government and Government agency land. There are surplus public-owned sites in just about all of our constituencies. I know that in my own area of Luton the incoming Labour council has, unlike the previous Liberal-Tory administration which did nothing in this respect, spent a great deal of time identifying small pockets of land which can be used for affordable social housing. I emphasise small pockets of land because in my constituency our housing crisis is acute. We are landlocked—we are green-girdled—so every available small bit of infill land is vital to us. Every local authority has a list of public-owned sites, but the details of those sites, to whom they are sold and what price they go for, remain restricted, according to the Town and Country Planning Association.
Of course, one of the biggest and most important objectives in this Bill and indeed in the housing Green Paper is to secure those additional sites, those surplus public-sector sites, for housing and, as stated, to create up to 50 per cent affordable homes on such sites. The Government announced in the Green Paper that 550 additional public sites would be brought from the British Railways Board (Residuary)—about 340 sites—the Highways Agency and the Ministry of Defence.
Unless legislation enables the HCA to dispose of land at less than best consideration in order to achieve its stated objectives, it is very difficult to see how much of that land can be brought into use for affordable social housing, and therefore how the HCA and the Government’s targets are going to be achieved. Without legislation to enshrine the principle that I am outlining in amendment No. 38, so that the HCA can dispose of land for less than best consideration in furtherance of its objects, it is possible that the HCA will find itself in a perverse situation. That has already occurred in a number of areas. For example, agencies such as NHS Estates have sold their land and buildings at full market price, believing that they were required to do so, often to private developers who were able to outbid registered social landlords. At the same time, however, the very same NHS trusts need new key worker accommodation. They then have to apply, or through RSLs bid, for further Government funding to provide key worker homes for their health care staff. So we are finding a double whammy and the Government are paying twice out of the public purse. That is why the amendments are so important.
A recent internal transfer of 96 surplus NHS sites to English Partnerships at a cost of about £320 million was described as a successful disposal scheme. The costs had to be recouped from the residual development. In other words, the developer had to sell off a proportion of those homes to recoup those costs. That makes it extremely hard to secure a significant number of affordable homes from the final scheme.
We all know that because social rented housing does not make a profit, it is usually the first thing to go on a private developer’s site when margins are squeezed. So we see repeatedly that sites like these, even sites that are in public sector ownership and disposed of at full market value effectively, are squeezed of the affordable rented housing that we know is desperately needed. So we have to look to ways in which we can ensure that the public sector land referred to in the Green Paper will be available for genuinely affordable homes that will go on being affordable in the long term and not just at first purchase. I think we have an opportunity to provide some leadership through the HCA. We all know in our own local authority areas of cases in which public sector land is disposed of and RSLs are outbid by private builders who do not take the same attitude to increasing the amount of affordable rented accommodation.
I have had experience in the real world. Before I came to this place, I was chief executive of a housing association. We saw local authorities who had the power to dispose at less than the full market value, but used the protection of the kind of terms that are currently in this Bill to avoid developing land. Dare I mention local authorities in London beginning with the initial W, predominantly Tory authorities, who use the argument that they have to dispose of what land is available at full market value in order to avoid their responsibilities for developing social rented housing? I saw that when I was running an RSL.
We all know that there are difficult sites to develop, such as land-locked sites. In my own constituency we have tiny sites in the most densely overcrowded areas which are simply not viable for RSLs to develop. I have had the experience over and over again of trying to develop sites in the most acutely overcrowded areas of housing need. Such projects simply would not stack up according to the Housing Corporation’s total cost indicator, as it was then. We then saw private builders come in with larger amounts of money to develop those sites for sale rather than social rented accommodation.

Alistair Burt: I am following the hon. Lady’s argument closely. A key part of her amendment involves taking out the consent of the Secretary of State and giving the responsibility solely to the HCA. Is that a deliberate omission or an oversight and does she not feel there is a potential conflict of interest because of the wider powers of the HCA? I agree with the sentiments behind what the hon. Lady is saying, but would it not be safer to retain some element of Secretary of State involvement?

Margaret Moran: I thank the hon. Gentleman for that intervention. I understand his sentiments in raising that. The thrust of the amendment is purposeful. It should not be seen as an exception that land is disposed of for less than best market value. At the moment, having to refer the matter to the Secretary of State in every instance, as suggested in the Bill, is a substantial impediment and it presupposes that land will always be disposed of at full market value. While I agree with him that there may be some caveats and some circumstances in which the Secretary of State’s involvement and interest needs to be safeguarded, that should not be automatic whenever land is disposed of at less than best market value.
My constituency in Luton is part of the Milton Keynes South Midlands growth area. I chaired a housing conference recently, at which I was very pleased that the Minister for Housing was able to speak. There is a great deal of enthusiasm, certainly in my own local authority, about delivering more affordable rented accommodation, and it has taken some time to get to that stage. The idea is perhaps not so enthusiastically supported by our neighbouring authorities of Bedfordshire county council and South Bedfordshire district council, but they are coming round to the idea. The need that we all articulated at that conference was to deal, as the Bill does, not just with physical regeneration—in other words, not just the numbers of new homes, important though they are—but with social regeneration and the wider employment and economic impacts. Often, they require additional subsidy and funding, which is very difficult for RSLs to achieve unless they receive land at less than best market value. Once again, it illustrates that if we are to achieve the stated objects of the HCA, we need to amend this part of the Bill. I thank the Minister for Housing for the helpful letter sent to members of the Committee on this issue. She has clearly gone to some lengths to find a way of overcoming this predicament. It is right that clause 50 contains a general consent, which includes a public benefit test, and also that the Local Government Act 1972 makes it possible for local authorities to be allowed to dispose of land at less than best consideration in certain circumstances. How many times has that been used in proportion to the number of sites that local authorities deal with? My understanding is that the number is very small indeed. It is seen very much as the exception rather than the rule.
I come back to the point that the Bill makes disposal at less than best consideration an exception. The ability of local authorities to dispose of land at less than market value, if it is in the public interest to do so, is a source of a contention. Many local authorities are aware that they have such a power and choose not to use it, sometimes, as I said, deliberately for their own political reasons or because of their view about whether they should have more affordable social housing in their area. I know from my experience as leader of a council, that officers sometimes feel under pressure because the district auditor is breathing down the local authority’s neck to discourage it from selling at other than best market price. More often than not, the financial circumstances of the local authority seeking to achieve the maximum capital receipt to invest back into other services—sadly, often not into housing—simply precludes the frequent use of the existing power.
So I simply say to my hon. Friend that resting on this existing provision in the Local Government Act and perhaps extending that to the HCA is not necessarily going to deliver the outcomes that we are all seeking to achieve here. I therefore ask him to look again at whether the sentiments behind the amendment could be incorporated into the Bill so that we can ensure that it is not presumed that best market value is the usual way of disposing of land. That would encourage a much wider view of how we can get the best value for our communities.
I remind my hon. Friend that there was a brief discussion of this in the evidence that we were provided with by the chief executive of the National Housing Federation, as I believe it is now called—it is a long while since I have been involved in front line housing. He indicated that the existing local government provision was confused and that the definition of public interest was very confused—and confusing for local government. He offered to help to clarify the definitions so that we could achieve our objectives for the HCA. With that in mind, I ask the Minister to reflect on whether the Bill gives sufficient powers to achieve the objectives that he has stated for the HCA.

Andrew George: I am pleased, as a co-sponsor of amendments Nos. 38 and 39, to speak to amendment No. 108, which takes another approach to trying to nudge the culture of the public sector in the right direction. Amendments Nos. 38 and 39 do not propose a revolutionary change; nor does amendment No. 108. It is a question of addressing a problem which has existed for many years, which is that there has been a failure of joined-up government in respect of the need to ensure that the assets that the public own—and hold—are put to good public use and that an authority achieves the best possible income.
I congratulate the hon. Member for Luton, South on the manner in which she moved these amendments and give her my strong support. I also pay tribute to my hon. Friend the Member for Chesterfield (Paul Holmes), as I know that he is passionate about this issue. He has been a great champion of securing public benefit for public assets. He is also a genuine champion of social housing and council housing in particular—both across the country and in his constituency.
This is about a change of culture for the public sector and achieving more joined-up government. The purpose of the two amendments tabled by the hon. Member for Luton, South is to ensure that the objects of the HCA are carried through in more of its activities than would otherwise be the case. The amendments will ensure that, when disposing of land, the HCA considers whether it is contributing to an improvement in the supply and quality of housing—particularly affordable housing—securing the regeneration and development of land infrastructure and supporting communities. It should ensure that there is genuinely the greatest public benefit. The context in which all that takes place is the planning system, and although the Bill is not about planning, we all know that when a planning system is fuelled by greed not need, and open-market housing is developed on the site which will net a significant market price in comparison with affordable housing, there is a temptation for any agency or public authority to secure the money and not put the work into achieving what would be, if it did put the effort in, of far greater social benefit to the communities concerned.
The HCA will face those challenges. In considering its position, it may decide to dispose of land, but in doing so, it may apply for planning permission for the site, as many people do for their back gardens. It may apply for planning permission prior to disposal, enter into section 106 agreements, attach a covenant to the land and dispose of it, possibly to an RSL, to ensure that the land achieves the best consideration within its own—the HCA’s—objects. That process would allow the HCA to achieve those objects, whereas the Bill will force the HCA to achieve a private-market value for the land, which will be significantly different from the fettered process that I have just described. A fettered planning permission and covenant would provide a belt-and-braces constraint on development of the land, and ensure that disposal met the HCA’s objects.
Such debates are not new to the House. For decades, the relative merit and value of, for example, cost-benefit analysis has weighed heavily on Members of both Houses on many occasions. If we take a two-dimensional view of cost and benefit, and construct, for example, a road through a piece of land taking into account the land’s development value but not its ecological value, we will end up driving roads and infrastructure through unique landscapes. I am not straying from the point; the point is that nothing in the Bill places a monetary value on the social outcomes and objects pursued by the HCA. The purpose of the amendments is to redress the balance and ensure that the social benefits are not overridden by the obvious attraction to any public organisation of making a quick buck, and to ensure that the social benefits and the objects of the HCA are realised through the manner of, and the regulations that apply to, the disposal of land.
The hon. Member for North-East Bedfordshire, in a very helpful intervention, asked whether it was appropriate to cut the Secretary of State out of the process entirely. That is a very good question. The Bill requires the Secretary of State to intervene too much. I have not previously conceived of circumstances, such as the disposal of burial grounds, in which the Secretary of State’s role is not about considering market value but about considering other issues outwith the objects of the HCA. There may be circumstances in which the Secretary of State would have to play such a role but, in regard to amendment No. 63, she would continue to have a role throughout the process and can intervene far too much and rather unnecessarily. However, the hon. Gentleman may be right that there are circumstances in which the backstop provided by the Secretary of State is relevant, and that is something that we may need to address in future. I strongly support and endorse the amendments tabled by hon. Member for Luton South, and I hope the Minister will give due consideration to the objects of the HCA and ensure they are delivered with regard to the disposal of land.

George Young: I support the speeches in favour of the amendments, which seek to mediate between two important imperatives. First, if a public body disposes of public assets, it should secure the best price for the taxpayer, and there are powerful arguments within the Treasury for going down that route. There are also arguments about transparency, because when we go down that route, there should be no doubt that the proper price has been secured. The second imperative, which pulls in the opposite direction, is the imperative behind the Bill, and it seeks to bring about a step change in housing output. The Government’s position is that there has been a market failure, and unless intervention takes place, they will not achieve the output of new homes that they wish to achieve. The whole object of the Bill is to address market failure—hence the powers, finances, and the planning powers that we are about to address.
As drafted, clause 10(1) leans very much towards what I would call the Treasury interpretation of best value, as it states that the HCA
“may not dispose of land for less than the best consideration which can reasonably be obtained unless the Secretary of State consents.”
That requirement is nuanced by the letter we received from the Minister, which outlines the circumstances in which the Secretary of State might consent. We will come on to clause 50, which deals with general consents, but I should like to ask the Minister whether there is not a risk that if a certain route obliges the agency to involve the Secretary of State, it would slow the process that the Bill is designed to accelerate—namely the output of social housing?
Let us imagine that the HCA has acquired some land, and wishes to dispose of it so that social housing can be built on it. Two routes are available: it can either dispose of the land for the best possible consideration to, for example, a housing association to which it gives a large grant to produce the required output of housing, or it can dispose of the land to the housing association for less than the best consideration and give it a lower grant. The impact on public funds would be exactly the same. As I read clause 10(1), it nudges towards the first route. In other words, the agency would obtain the best consideration, then give the housing association a large grant to compensate for the fact that it had paid market value. I wonder whether the Minister really wants to have what I would call an un-level playing field and whether the agency, in the circumstances that I have described, might have good reason not to go down the best consideration, high grant route, but go for the less than best consideration, low grant route, which ends up at exactly the same position, albeit by a different route. Having listened to other Members’ speeches, I believe that we need clarity. The last thing we want is a whole lot of test cases in which the HCA or local authority is challenged because it has disposed of land for less than the best consideration and there is a litigious local council tax payer who feels aggrieved. Some people may disagree with the planning decision behind the disposal. I therefore have great deal of sympathy with the speakers seeking clarity. I think that the amendments—and the Minister has been offered a wide range to choose from—seek to inject some clarity what at the moment is a rather ambiguous position.

Alistair Burt: I rise to support the sentiments behind amendment No. 38 but also to promote amendment No.63 in my name and that of other hon. Friends. I also back the call for clarity made by my right hon. Friend the Member for North-West Hampshire. I disagree to an extent with the letter that the Minister for Housing sent us in response to comments made during the evidence session to try to provide some guidance to the interpretation of clause 10.
Our amendment would keep an involvement of the Secretary of State in the wider issue. We will come to the wider issue of why it is important to have some clarity and why there should be a wide definition of the sense of best value in a moment.
I return to the concern regarding the new agency if it is not a merger of two bodies but something new. The coincidence of powers contained in the new agency makes it very powerful and raises questions that were not necessarily there when we were dealing with two separate entities. It has come up before. The Campaign to Protect Rural England, for example, raised this concern. I quote from its written evidence:
“Given that the HCA’s sweeping powers may include planning powers, careful consideration should be given to ensuring that safeguards are adequate to avoid abuse and to deal with potential conflicts of interest which may arise, eg. between the HCA’s roles as developer, landowner and planning authority.”
That is why I think we still need some involvement of the Secretary of State. It is not necessarily designed to hold up matters but to ensure that somebody somewhere is accountable as the work of the HCA proceeds.
Another fear that has been expressed several times is the conflict between the overall objects of the HCA, as set out in the Bill, the comments made by the Minister and the drive towards achieving a target. Let me pose the situation that there is concern that the target for house-building numbers is not being reached and the pressure, therefore, is on the agency to deliver, or else their chief executive might be sacked like the chief executive of the Thames Gateway. The concern is that, at that stage, decisions are made that are not necessarily in the best interests of the rest of us. In relation to disposals of land, the determination to get the houses built may lead to decisions where the interests of the taxpayer and the nation are subsumed under the interests of reaching a target.
If the Secretary of State is not involved, there is no one for the House to call to account in those circumstances. That is why I think it is helpful to keep the Secretary of Sate still involved in this process because these are big powers. There is a risk of market distortion, the ability of the agency to go in and outbid anyone else——perhaps a small housing association—and the concerns raised by the hon. Member for Luton, South who moved amendment No. 38. I know that my hon. Friend the Member for Welwyn Hatfield had that experience in his constituency, where a small housing association was outbid by English Partnerships. That a late decision was made to dispose of the land for a much smaller sum to get the house building going may be evidence of a conflict of interest, so to have the Secretary of State involved and held to account for such decisions would be helpful.
To turn from why the Secretary of State should be involved to why we are considering clarity in this particular case, I support the general tone of the arguments made by the hon. Members for Luton, South and for St. Ives and my right hon. Friend the Member for North-West Hampshire. It would be helpful to have something on the face of the Bill that indicates that best value may be wider than just market considerations.
A number of those who have given evidence have raised this point with us. Written evidence from the National Housing Federation says:
“The Federation believes that the test of disposal of land is that it should be for the greatest public benefit”.
As my right hon. Friend said, there are a variety of menu options for the Minister to choose from in getting that principle enunciated clearly. It is straightforward: because we are dealing with the provision of community assets, there are circumstances in which going for the pure best financial value may not be the right thing to do. Accordingly, allowing the agency to take the risk of being able to take other matters into consideration is, we believe, necessary—as I know the Minister believes. That was the import of the letter from the Minister for Housing on her explanation of clause 10. The point of her letter was to say that a specific power is not necessary in the Bill, because the Bill contains in clause 50 a general power that relates back to—and is presumably modelled on—section 123(2) of the Local Government Act 1972, which allows the general power. The Minister’s point, and presumably that of the Government, is that that does the job and allows the wider consideration. The Minister suggests that that is the way that it has been used and therefore there is no particular problem, so let us keep it as it is.
My information, in talking to people widely about this, is that that is not quite the case. There is hesitation and uncertainty about the use of the provision and there have been occasions when possible deals have been prevented because officers and councils were not sure whether they had the powers. Someone involved in regeneration and development in urban areas has given me a specific example relating to a project in Birmingham, stating:
“The Council were marketing the former Science Museum and were looking for substantial regeneration benefits including public use of the historic industrial buildings on the site and extensive public realm works, including the restoration of a former spur off the main canal.”
My informant—[Interruption.] Well, it is the best term we can use. The gentleman supplying this information to me says that his company made a bid and was recommended by officers to be selected, both on the grounds of highest financial offer, and output, but he adds:
“At the last minute before the Members’ meeting to ratify this——long after the deadline for submission and financial offer——one of the other bidders raised their offer and the officers immediately advised Members that this had to be considered or they would be at risk of a challenge under S123, because they would be accepting a bid which may not represent ‘best consideration’.”
My correspondent points out:
“The dangers this highlights are the descent of formal tenders into Dutch Auctions, but mainly the risk that Councils will not hold out for better regeneration outputs, just most cash. That will always tend to deliver fewer ‘affordable’ homes or community benefits.”
There is other evidence of a lack of certainty about the use of this general clause, which the Minister and his Department are relying upon now. Accordingly, the amendments invite the Minister to give effect to what is plainly both his intention and the intention of the Minister for Housing, namely to allow a wider interpretation, but would it not be far better to put this in the Bill? Accordingly, that is what we seek to do.
The Department retains, through the involvement of the Secretary of State, the power to ensure that such opportunities are not misused and that there is not widespread mishandling of the power to the detriment of taxpayers. It enables the housing—and the country in general—to be protected because, should there be widespread misuse of such a power, the House would be able to question the Secretary of State and Ministers directly and seek an explanation for what is happening. This is why we prefer the Secretary of State’s consent to be there.
For the purposes of clarity, and to ensure that the Bill actually delivers what the Minister says he wants it to deliver, it would be far better to accept one of the amendments at some stage and clarify the Bill, as Members in all parts of the House seem to want. The amendment carries the power of Government Back Benchers, of the representative of the Liberal Democrats and of Conservative Back and Front Benchers. In the spirit of the Committee and the way in which we have been going about our business, it would be helpful if the Minister, with his own particular style and desire to move with the feeling of the Committee in the best interests of all of us, were to accept the amendment.

Iain Wright: I have enjoyed the debate. I think hon. Members have come at it from different angles, but there is some consensus in the Committee. I hope that I can demonstrate that the amendments are unnecessary and that the current provisions in the Bill are the most appropriate way forward. Mr. Gale, I do not want you to rule me out of order——you would be on your feet very quickly if I were——and I do not want to have a clause stand part debate on this, but as many amendments refer to “best consideration”, it would be useful if I outlined to hon. Members what that phrase really means.
“Best consideration” generally means the best market value that can be obtained. Since the public evidence sessions last December, it has become clear that matters of wider public benefit may be taken into account only if the benefit has a monetary value that can be assessed. The Minister for Housing wrote to the Committee on 10 January on that matter. The hon. Member for North-East Bedfordshire spoke about amendment No. 108, which seeks to set a definition of “best consideration,” particular to the HCA. It adds a requirement that the “best consideration” obtained should mean
“the best outcome secured in respect of the of the objectives of the HCA.”
I suggest that that is unnecessary and provides an added level of complication. It would risk altering the common understanding of “best consideration” with regard to this agency—the HCA—alone. In respect of clause 10, we would expect all the agency’s actions to be in pursuit of its objects.
I now turn to amendments Nos. 38 and 39, ably tabled and passionately argued for by my hon. Friend the Member for Luton, South. As the hon. Member for North-East Bedfordshire said, they would remove any restrictions on how the HCA may dispose of land. That would leave the Secretary of State no obvious mechanism by which to ensure that value for money and/or assets was being obtained. Nor would there be an easy mechanism by which the agency could be held to account for its decisions in relation to the disposal of land. This was the point made by the hon. Gentleman.
In our view, the restriction on the disposal of land is needed to safeguard the public purse and to ensure that resources that belong to the taxpayer are not used inappropriately—for example, to give an unfair subsidy to private companies. Equally—this is an important point, which I fully understand from the oral evidence sessions in December and the sentiments expressed today—we do not want to place unnecessary financial or bureaucratic obstacles in the way of the agency’s objectives. We want the agency to get the best value for public money and I fully accept that that will not always mean selling land for the highest price.
I suggest that the current provisions in the Bill, clause 10 in conjunction with clause 50, is the Goldilocks approach. It is not too onerous, not too free, but just right. I think that is probably the best thing. It is a good balance between providing assurance to the taxpayer and value for money, while making sure that the agency can achieve its objectives—namely, to improve housing supply and regenerate communities.

Nick Raynsford: I have followed the Minister’s argument and supported it up to this point. The question it inevitably poses is the terms of the consent that may be given by the Secretary of State. He may be going on to describe in some detail what terms might be applied under the powers in clause 50 and, if so, I will not pursue it at this point. If not, it is essential, if we are to feel confident, that the right balance is achieved between the two competing objectives of financial probity and facilitating appropriate social housing development, and that there is clear guidance that enables the agency to use its powers appropriately to reduce the price at which property is disposed of in appropriate circumstances to further housing development.

Iain Wright: I thank my right hon. Friend for that intervention. I will touch upon that in some respects as I answer the amendments, but I suggest that we put a marker down in terms of discussing it further under clause 50. That would be helpful and useful, both for my understanding of where the Committee is coming from and for setting out what I think is important.

Andrew George: Referring to the words of the right hon. Member for North-West Hampshire—the “imperative” on the Secretary of State—will the Minister clarify whether best consideration would be, in the scenario which I described, the HCA applying for planning permission, welcoming the constraints of a section 106 agreement, placing a covenant on the land in order that it can achieve the agency’s social objectives and then disposing of the land with those fetters or impediments on it?

Iain Wright: The hon. Gentleman raised an extremely interesting point. It was food for thought. I think he referred to the agency trying to make a quick buck. I know that he was being flippant and I understand the sentiment exactly—it was an honourable and correct sentiment—but according to the agency’s intentions and objectives it is not there to be a land speculator or to make a quick buck. All land that the HCA will own will be sold solely for the purposes of meeting its objects. I remind the Committee of clause 4(2), which states that the
“powers of the HCA are to be exercised for the purposes of its objects or for purposes incidental to those purposes.”

Grant Shapps: Before we move away from the point about the balance between the Secretary of State giving permission for the disposal of land at less than the market rate and the alternative of removing the Secretary of State, as proposed by amendments Nos. 38 and 39, can the Minister—in order for the Committee to fully understand the point—indicate how much that power has been used by the Secretary of State in earlier legislation? If he cannot tell us now, he could reply this afternoon or on Thursday, but how many times has the Secretary of State intervened to allow disposal of land at less than market value?

Iain Wright: I am grateful for that intervention and I was going to respond in respect of my hon. Friend the Member for Luton, South. If the Committee will forgive me, I will try to provide figures when we discuss clause 50. Given the nature of the general consents regime, the Committee will recognise that it might not be possible to provide accurate and complete figures because records may not be centrally held on the disposing of land at a local level. However, I will do my best to provide them if I can for the Committee.
I was responding to the point about being a speculator. [Interruption.] I do not think that the agency will be in that position. The agency is there to improve the supply of housing and that is the important point. [Interruption.] If I may be allowed, I want to elaborate. This is a very important point: every bid for every site sold by the HCA will have to demonstrate how its proposed developments will meet the agency’s objectives, which we have discussed. Where the agency sells land at best market price I suggest that the receipts of that sale could be reinvested by the agency into further delivery of its objects. I do not envisage a scenario in which the agency would be putting covenants and planning permission on in order to boost the price. I do not think that that is what it will be doing.

Andrew George: In that case, the Minister may have misunderstood what I was saying, which was about restricting the options on the future use of land by placing section 106 agreements and covenants on the land to ensure that it would meet the housing needs of the local community. If on most occasions the HCA were to dispose of land where it is appropriate that the land could be used for housing, made sure that it sought a restrictive planning agreement with a section 106 agreement beforehand and also placed a covenant on that land to ensure that it could be restricted, but then sought the best consideration from those developers who could achieve this—mainly registered social landlords—would that be within the orbit of what the Minister is describing?

Iain Wright: That is a theme emerging from today’s session. This is not being done in a vacuum, but as part of the planning framework. We do not expect speculative offers that do not coincide with the local development framework. It is important to point out that the agency will be responsible for ensuring that the specification will be sufficiently detailed—this will be a key point—to avoid radically unsuitable bids coming in. I hope I have answered the hon. Gentleman’s point. The specifications may require the consent of the Secretary of State if they are to include conditions for the wider public benefit that have no monetary value. We would expect the agency to work on that basis.
Amendment No. 63 would require the Secretary of State to consider wider public benefit if granting permission to dispose of land at less than the best consideration. I was very struck by the oral evidence sessions in December, where people spoke about the need for land disposal to achieve the best possible outcome for the community, not simply the highest monetary value, and I have a lot of sympathy with that. However, I suggest that this amendment is unnecessary precisely because of the Goldilocks principle that I mentioned early on. Clause 50 allows the Secretary of State to issue a general consent, setting out the circumstances in which the agency may dispose of land without seeking specific consent. That general consent can address issues of wider public benefit, including the need to obtain better value for money for the public sector as a whole, as well as ensuring proper accounting and reporting responsibilities, and compliance with state aid rules.
A general consent has been in place in respect of local authorities’ disposals since 2003. That general consent allows local authorities to dispose of land at less than the best consideration in some circumstances. I reiterate to the Committee that my right hon. Friend the Minister for Housing stated that we would wish to issue a similar general consent for the homes and communities agency.

Nick Raynsford: I am very grateful to my hon. Friend, and I do not intend to push this much further. I appreciate his reassurance that there will be a general consent, and am pleased to hear that, because I myself had something to do with the general consent for local government that was issued in 2003. It is right there should be a parallel general consent for the HCA. It would help members of the Committee if, when we consider clause 50, we could have some indication of what the broad parameters of that general consent would be, how it will compare with the existing local authority consent and whether similar or different principles will apply.

Iain Wright: I reiterate the point that I made to my right hon. Friend earlier, which is that he set a very important marker down and I will certainly want to cover that in clause stand part debates. The Goldilocks principle is an important one—I like it so much I have mentioned it three or four times. I think that under the system outlined in the Bill, clause 10, in conjunction with clause 50, provides the right balance between making sure that taxpayers have assurance that the Secretary of State will be able to see what the best consideration is so that they get value for money, and making sure that the agency can fulfil its objectives.
My final point before I ask for the amendment to be withdrawn is on what came out clearly from the oral evidence sessions in December: the process of public agencies bidding up land. I have sympathy here. That process makes sure that we do not get good value for money, and I will address that.
The current system operated by English Partnerships is the best approach to take: a closed bid process. English Partnerships treats all bidders the same. If two bidders can meet all the quality standards and satisfy the terms of the brief—do not forget what I said earlier about the specifications of the bid, such as affordable housing or whatever—then English Partnerships will take the highest bid. There are no bidding wars, because the tendering process is closed: individual bids are not disclosed to other bidders and there is no opportunity to make a revised bid.
Given the Goldilocks principle, I think that the current balance is the right one. It satisfies value for money and making sure that the agency’s objectives are achieved. Therefore, I hope that my hon. Friend the Member for Luton, South and other hon. Members will withdraw the amendments.

Andrew George: I do not know whether the hon. Member for Luton, South intends to respond.

Roger Gale: Order. I shall call the hon. Lady to wind up the debate, but if I call her, then the hon. Gentleman cannot speak.

Andrew George: I apologise, and am grateful for that clarification. I am still rather unused to the procedures, even after all these years.
In response to the Minister, I am sorry to say that I am not reassured by his attempts to reassure us about the Government’s approach on clauses 10 and 50. I do not entirely follow the Goldilocks principle—I do not know if it is the principle of stealing the baby’s porridge or not. I fear that the Minister did not entirely follow the scenario that I attempted to describe, which was quite the opposite of the speculative principle. My scenario envisaged giving the HCA the power to restrict the market for the potential sale value of the land assets that it owned by restricting that land to certain uses—uses that would assist the HCA or be directed towards the objects of the HCA. It might well dispose of land as a result of obtaining planning permission, seeking and welcoming the restrictions of section 106 agreements and itself applying a covenant on the land in order to achieve a social objective. Only those who could achieve the objectives would then be competing—through tender or other means—to purchase that land.
In other words, such land would not then be sold for expensive executive housing or, in my part of the world, for second or holiday homes and other activities. The HCA, which had owned the land, would restrict it and say that it could be used only for social and low-cost rent accommodation, meeting a local need. Achievement of that would be written into the planning permission and the covenant. I will gladly give way to the Minister, but my intervention sought clarity as to whether the HCA would be entitled to do that routinely and still fall within the Government’s definition or interpretation of what was the best consideration on the disposal of that land.

Iain Wright: Was not the point that I mentioned during my contribution the absolute importance of the specification? Why is the agency disposing of the land? It may be, as part of the specification of the bid, that it would be that 90 per cent. of the land needs to be on the basis of affordable housing. That is the way that it would go to market. The important point is to set out at the start of the process the whole specification that would provide the certainty required by the market.

Andrew George: That is helpful. If now the Minister is saying on the record that on every occasion where the HCA is disposing of land it can set out that clear objective within the programme for its disposal, then, as I described, I hope that the HCA can go further and ensure that that is the outcome by achieving the necessary planning permissions and attaching the necessary covenants to ensure that it is ultimately delivered and not lost after disposal. I am not personally reassured yet. This is an issue that I think we will come back to. It is a big issue—a challenge. It is an issue about the culture of government and challenging the intervention of the Treasury in the manner in which land such as this is disposed of. It has bedevilled—a term that I know a lot of those in local government like to use—a lot of efforts at local government level to achieve social outcomes from these extremely valuable assets. I hope that the Minister will have the opportunity to reflect upon the debate, because I think and hope that we will have an opportunity to come back to this, not only in the debate on clause 50, but during future stages of the Bill.

Alistair Burt: I thank the Minister for his consideration of the matter, but still do not feel that the issue of clarity and how the general clause is to be used by authorities outside has been settled. As the hon. Member for St. Ives indicated, we have not got what we would like in the Bill. As we have a general consensus here and if we know what we would like to seek, I would be keen to press the Minister further and to press amendment No. 63 to a vote, if need be.

Margaret Moran: I stress at the outset that I do not support amendment No. 63 precisely because of the point that I made earlier. One of the problems is that, where there is a presumption of referral to the Secretary of State, it is a negative presumption. In other words, the general pattern of life will be disposal at full market value, with the exception going to the Secretary of State. What I am concerned about is that, although we all agree on the excellent objectives of the HCA and can will those objectives, we also have to will the means to deliver them. I am forever a practical politician and having also worked on the frontline of finance and development within RSLs, I know the difficulties of delivering affordable social housing. Of course, the new organisation will make a tremendous leap forward in enabling us to achieve our objectives and the delivery targets. However, as the right hon. Member for North-West Hampshire outlined eloquently, the practical realities are that there are two options for RSLs. Either the land is discounted at the outset and developed swiftly or the subsidy—in effect—or grant goes in at a later stage. As I know from my experience and from talking to RSLs in my constituency, that the practical outcome is that, very often, unless RSLs act swiftly to acquire the land, they are outbid by the private sector. Any delay in the process leads to practical outcomes that are not what the Minister wants to achieve. We all what to achieve the delivery targets swiftly, but I fear that what is outlined in clause 10(1) will not deliver the practical outcomes that we want as swiftly as we want and could slow down the whole process. I absolutely agree with the hon. Member for St. Ives about the need for clarity. We talk about “best value”, “best value for communities” and “public benefit” without clear definitions. We all know that the Treasury likes in all things to have clarity and security in numbers, but what we are talking about in the Bill is social value and we have to be a lot clearer in the Bill as to what that means in practical and outcome terms. We need a great deal more clarity.
I raised the issue of how often the Local Government Bill had been used in the way the Minister described and further questions have been raised as to how often the Secretary of State has used her powers to override a market value decision, or had such a decision referred to her. We need an evidence basis for this discussion, because we have a lot of anecdotal evidence from people working on the front line to suggest that those powers are used only in exceptional circumstances and we could face a situation where the Minister’s best endeavours to speed delivery of more affordable homes could be thwarted because of the problem of the exception basis.
I take to heart the point that the Minister made about specifications on disposal, but it is not how that would work in practical terms. I urge him not only to come back to us on the two specific questions that were raised, but to provide greater clarity as to how the proposal would work in practice. That might provide the assurance we need. I agree that if there is to be a debate regarding general consent—as my right hon. Friend the Member for Greenwich and Woolwich said, we need to strike a balance that achieves absolute clarity—when we discuss clause 50, there will be a helpful opportunity to illuminate some of the issues that have been raised. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 63, in clause 10, page 4, line 31, at end insert
‘provided that the Secretary of State takes into account the wider benefit to the community where such disposal takes place’.—[Alistair Burt.]

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 9.

Question accordingly negatived.

Roger Gale: Hints have been made, and I am determined in my own mind that there will not be a stand part debate on this clause. I say so now in case anybody has any burning matter they wish to raise and which cannot be discussed in the debate on the next amendment.

Lembit Öpik: I beg to move amendment No. 97, in clause 10, page 4, line 40, at end insert
‘subject to consultation with landowners whose property borders the land under consideration for disposal.’.
I apologise for my delay in coming to Committee this morning, Mr. Gale. I was in another room preparing for government, but I would, I am sure, be ruled out of order if I justified myself further, although I am tempted to do so. I tabled the amendment with my hon. Friend the Member for St. Ives (Andrew George) to clarify certain concerns.
Harold Macmillan said that at the heart of democracy lies dialogue, but that it could only be made to work if one stopped people talking. We are only on clause 10 after seven Committee sittings. At the current rate of progress, I fear that we will finish our consideration of the Bill on 31 January 2009 as long as we rush through the schedules and new clauses. In an effort to hasten proceedings, I will exercise a self-denying ordinance, and I hope that the Minister can prÃ(c)cis his comments as well. That will help us to speed up, and prevent us from abandoning the Bill in Committee at clause 25 which, at the current rate of progress, is where we will end up.
The amendment seeks to highlight landowners’ justifiable concern about the HCA seeking to dispose of land without consultation when their land borders the property under consideration. Would it not make sense to require the HCA to enter into dialogue with bordering landowners, to ensure that their views and concerns are taken into account? Without that mandatory requirement, there is a risk that the HCA will ride roughshod over local considerations and miss the sage advice of landowners who may have a perspective on the land under consideration. They may also wish to make useful proposals about how the land could be used in the future. The amendment would require the HCA to do something that is not just about being a good neighbour, but about being a good manager of land. I should be grateful for the Minister’s perspective, and I hope that he will accept the amendment.

Iain Wright: I welcome the hon. Gentleman to the Committee. I am slightly intrigued by the fact that he is preparing for government on his own, but we will leave it there. Despite the fact that I like him, I strongly reject the amendment, which would place the Homes and Communities Agency under an obligation unlike that for any other landowner in England. It would require it to consult neighbours before it could dispose of any land that it owns. The manner in which it is phrased is not the right way to address these concerns.
May I stress again something that I have said in debates on earlier clauses? The way to restrict land use—and I imagine that that is what the hon. Gentleman wants to do—is through the planning system, not through provisions requiring landowners to consult their neighbours on the question of whom they sell their land to. If there are objections to the intended use of a site and planning permission is required, objections can properly be made at that point. If the requirement in the amendment were imposed on the agency it would slow down any progress the agency could possibly hope to make on any schemes that involved the transfer of ownership, by whatever means, of that land.
The amendment would also be likely to limit the value that the agency could obtain for any land that it wanted to sell, although best consideration would still pertain, because if the concerns of neighbours were taken into account, that would probably limit the number of prospective buyers who could be considered and thus reduce competition for any particular site. That would make it impossible for the agency to obtain the best consideration for the land, irrespective of the wider community benefits associated with schemes that we discussed in earlier clauses.
The amendment would therefore make an unnecessary imposition on the agency. It is almost like requiring permission from one’s neighbours to sell one’s house. It is not necessary, and it would slow progress towards achieving our objectives of 3 million new homes by 2020. I have set out my strong objection to the amendment, and I hope that the hon. Gentleman will withdraw it.

Lembit Öpik: To clarify the position, I was not preparing for government on my own—I was preparing for government with the Cabinet, as it will be constituted after the next general election. I am concerned that the Committee will still be sitting then, but as I will be in government, I can table all my amendments whatever way in hell I want.
Moving swiftly on to amendment No. 97, I accept that the Minister strongly rejects it, but he does so for the wrong reasons. I am not trying to restrict land use—far from it. The HCA will, necessarily, be an authority; it will probably operate at arm’s length from many of the communities in whose land it involves itself. I was simply seeking to make sure that the HCA is sensitive to the considerations of neighbours of land that it sells. The Minister re-emphasised the fact that the only consideration in the HCA’s eyes is financial use, but it would have been nice if the Government recognised that being a good neighbour sometimes requires taking other things into consideration, if only to acknowledge that landowners of neighbouring property can sometimes provide a perspective that is not self-evidently apparent in the bald facts presented to the HCA by officials. I am sorry that the Minister has taken such a robust position, but we will consider what he said. We want to reserve the right to return to the matter on Report, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 ordered to stand part of the Bill.

Clause 11 ordered to stand part of the Bill.

Schedule 3

Main powers in relation to land of the HCA

Iain Wright: I beg to move amendment No. 18, in schedule 3, page 129, line 24, after ‘HCA’ insert
‘if the Secretary of State is satisfied that—
(a) an alternative right of way has been, or will be, provided, or
(b) the provision of an alternative right of way is not required’.

Roger Gale: With this it will be convenient to discuss Government amendment No. 19.

Iain Wright: Broadly speaking, the procedure set out in schedule 3 is not dissimilar to those found in other pieces of legislation, and I draw to the Committee’s attention the Regional Development Agencies Act 1998, the Highways Act 1980 and the Town and Country Planning Act 1990.
Unlike the comparable powers in those pieces of legislation, in the Bill as drafted, there is no mandatory requirement for the Secretary of State to be satisfied either that an alternative right of way has been, or will be, provided, or that an alternative right of way is not necessary, although it is likely that those are matters to which it is reasonable to expect the Secretary of State to have regard when deciding whether or not to make the order. Including a requirement for the Secretary of State to be satisfied that one of the matters outlined above does in fact apply before making any order to extinguish a public right of way would make the provision far fairer in terms of natural justice and bring it into line with comparable legislative provisions.
Government amendment No. 19 allows the Secretary of State to make an order to extinguish a public right of way over any land of the agency, provided that the statutory procedure is followed first. It is not necessary to exclude land held by the HCA for its own administrative purposes from that power. For example, the agency may take office space in a building that forms part of a larger development for which it is necessary to extinguish a public right of way. The amendment effectively brings the provision in the Bill into line with the provisions that apply to the Urban Regeneration Agency under the 1993 Act. Although I am reluctant to mention it following our earlier discussion, the amendment has a modernised wording.

Alistair Burt: I appreciate the Minister’s explanation, but I wish to raise a couple of matters in relation to schedule 3, largely on behalf of the Campaign to Protect Rural England. The Minister has probably seen a couple of representations by the CPRE, which said in written evidence to the Committee:
“We are similarly concerned by provisions in the Bill that would give the Secretary of State the power to extinguish public rights of way and curtail ‘further investigation’, including a public inquiry, if the Secretary of State considers he/she has ‘sufficient information’ (Schedule 3, Part 2). The implications of this clause need to be carefully examined to ensure the legislative framework provides for a full investigation and public inquiry to take place where necessary. These are essential to maintain public accountability and transparency in decisions affecting rights of way.”
There is, as we know, huge public interest when anything is considered that could alter rights of way. The Ramblers Association believes as a matter of principle that changes should not be made, and certainly not without a public inquiry. It is keen to ensure that the greatest possible care is taken in dealing with any legislation that might in any way conflict with the right, hard won over many years, through public demonstration, public trespass and Acts of Parliament, to ensure that people can exercise rights of way.
That brings me back to concerns that have already been expressed and the need to ensure that, because of the huge powers the agency is taking, there is no constraint on the public’s powers to make sure that the very best and most open inquiry, procedure or public consideration takes places. The provisions give the Secretary of State the greatest power. There is no statutory right, as far as I can see, in schedule 3 to inquiries. There is a duty to ensure that objectors have an opportunity to appear . Paragraph (7)(3)(b) states that when the Secretary of State is considering objectors’ opportunities to appear and be heard he must ensure that that the HCA is present, as well as
“any other persons whom the Secretary of State considers ought to be given the opportunity.”
That does not give those people the right to appear, as the Secretary of State has to agree that they have an interest. The provision therefore puts a large amount of power in the hands of the Secretary of State. She also has the power hold a public inquiry. The measure may be modelled on existing provisions but, because of the potential conflict of interest in the agency’s powers, the matter needs to be considered even more carefully than it has been in the past.
The CPRE made an intervention, too, regarding the powers to override easements, and it discussed the importance of public land. It proposed an amendment, but it was not included in amendment paper. However, I can express its sentiments in this debate, as it concerns the use of powers in clause 11 and schedule 3. The CPRE is interested in the Government’s view on the openness of proceedings dealing with areas of outstanding natural beauty, national parks and the green belt. The CPRE wanted to include in the Bill a
“requirement that in carrying out its functions the HCA shall have regard to the desirability of conserving the Green Belt and designated landscape, Areas of Outstanding Natural Beauty and National Parks and should ensure that its plans and activities fully respect the purposes and objectives of the Areas of Outstanding Natural Beauty, National Park and Green Belt designations in dealing with the extinguishment of rights of way and the powers to override easements.”
I should be grateful if the Minister acknowledged the important powers that the agency is taking. The combination of powers increases the importance of doubling safeguards against conflicts of interest. It would be helpful if he illustrated how those problems will be dealt with, and provided guidance on the ordering of public inquiries and the need to ensure that the relevant people have a right to appear to plead their case.

Lembit Öpik: I have experience of the vexatious use of historic rights of way in my constituency. On one occasion, ramblers insisted on standing in a garden belonging to some of my constituents, and watched them have a barbecue. They said that in the past there was a right of way that led into a forest behind the garden. The problem was resolved at the time simply because the ramblers got bored and went home, but sometimes we need a greater defence of the rights of people who have unwittingly found themselves subject to an attempted enforcement by others of long-defunct rights of way.

Alistair Burt: Should ramblers not have an opportunity to observe a future Government, even at a barbecue, and informing themselves about them? I think that that would be helpful, and no doubt that is why those people stood there so long.

Lembit Öpik: I look forward to the Government’s perspective on the matter, and perhaps the Minister will comment in his reply. I can see the case for the amendment, because sometimes rights of way need to be handled in a common-sense way. The issue is the all-pervading power of the HCA. I am sure the Minister will say that his Administration are benign and will not misuse the power, but how can he be sure that a future Government, perhaps with an ideological objection to rights of way, will not take advantage of the amendment to use the HCA’s powers on a wholesale basis to close down rights of way which, as has been pointed out, have been fought for long and hard and could be snatched back in the blink of an eye?

Nick Raynsford: I wish to raise a very small matter arising from the extinguishing of rights of way, and I hope that it is appropriate to raise it now rather than in a clause stand part debate. It relates to mobile telecommunication masts or apparatus, which are covered by paragraphs 11 to 15 of schedule 3. In the event of an extinguishment of a right of way, it appears to be the rule that the operator of an affected network mast can abandon their electronic communications apparatus by serving notice to that effect on the HCA. I do not expect many rights of way to be extinguished under the provision, and I do not wish to conjure up a nightmare scenario of masses of rusting, abandoned mobile telecommunication masts. It is, however, possible that some masts will be abandoned, so there is an inequity in the provision.
As drafted, the provision would allow network operators who want to move their mast to another location to recover from the HCA the cost of doing so under paragraph 14. If, however, they simply abandon the mast and leave it to rust, there is no provision for their meeting the cost of its removal. According to paragraph 15, responsibility for such equipment “vests in the HCA”. I suppose that the HCA will be approached by aggrieved parties in the area worried about rusting equipment that has been left behind, saying, “You have now got ownership, please remove it”. There is no provision for the HCA to recover the costs of removal from the operator, and I wonder why that is the case. I do not expect the Minister to give an instant reply, as it is a rather obscure point, but I would be grateful if he wrote to me at a future date to reassure me that we will not end up with the HCA’s budget being eroded by the costs of disposing of unwanted, rusting telecommunication masts.

Iain Wright: I enjoyed that debate, which usefully set out the Committee’s concerns. I am grateful to my right hon. Friend the Member for Greenwich and Woolwich for his courtesy in accepting that I may need to write to him about his concerns about electronic apparatus. I do not wish to box myself in with regard to future correspondence on the matter, but I imagine that the whole point of the extinguishment of rights of way is that land is coming up for development, and such issues would be part of the contractual arrangements. However, I am grateful to my right hon. Friend for allowing me to write to him about the specifics.
I am interested in what the hon. Member for North-East Bedfordshire said, and he made some important points. It is true that the rights of ramblers have been hard fought for, and it is right that we should protect them as much as possible. The Government amendments strengthen those rights, and the Bill offers a clear procedure for doing so. It is very important that people have certainty and confidence in our proposals. I am intrigued by what the hon. Gentleman said about public inquiries, and I may have misunderstood him. I think that the procedure in schedule 3 is entirely clear: the Secretary of State must publish notices, there is a minimum period of 28 days and, crucially, paragraphs (5) and (6) state that the Secretary of State is obliged to consider any objection that is not withdrawn or otherwise resolved.
It continues:
“The Secretary of State must, before making a final decision, give the objector an opportunity to appear before, and be heard by, a person appointed for the purpose by the Secretary of State.”
Usually, that tends to be an inspector.
Paragraph 10 explicitly states:
“The Secretary of State must cause a public local inquiry to be held in relation to an objection to a proposal to make an order under paragraph 3 if the Secretary of State considers that the matters to which the objection relates are such as to require investigation by such an inquiry before the Secretary of State makes a final decision.”
As I said, nothing has changed in respect of existing procedures there. If anything, I am keen, by means of the Government amendments, to tighten things still further; to make sure that alternative rights of way are provided, and that the ability to be consulted and heard remain. So I am intrigued by the hon. Gentleman’s sentiments, but I hope that I have reassured him and that he can support the Government in their amendments.

Alistair Burt: I should certainly have said that the impact of the amendments is to improve circumstances and to make things clearer things in relation to the concerns of ramblers, and the need to ensure that alternatives are available.
It is ultimately the Secretary of State who requires to be satisfied that an inquiry is needed. My point was to ask whether, bearing in mind the potential conflicts of interest with the work of the HCA—both as an acquirer and developer of land—the Minister considered that any strengthening of the provisions might be necessary. His answer is that he does not think that it is necessary, and clearly at present there is no evidence to suggest that the powers would be used improperly or that people would be left without an opportunity to have an inquiry if they believed that there were strong circumstances and—objectively speaking—if their view appeared to be rather stronger and better founded than the Secretary of State’s decision. That is for the future. The Minister’s position was quite clear; he believes that the existing procedure will be satisfactory, even with the new combination of powers that the agency is taking. That is fine, I accept his position. [Interruption.] The CPRE wants to check on my views; I will let it know by telephone later.
I am satisfied that the amendments are designed to be helpful and the Minister has answered my points, so I am content at this stage.

Amendment agreed to.

Amendment made: No. 19, in schedule 3, page 129, line 25, leave out sub-paragraph (2).—[Mr. Iain Wright.]

Schedule 3, as amended, agreed to.

Clause 12 ordered to stand part of the Bill.

Schedule 4

Powers in relation to, and for, statutory undertakers

Question proposed, That this schedule be the Fourth schedule to the Bill.

Lembit Öpik: I have one question relating to schedule 4. Paragraph 25 at the bottom of page 143 is entitled “Power to curtail decision-making process”. How will the Minister ensure that no future Minister will use this particular section of the schedule to curtail the consultation process unreasonably? As I understand it, this part of the schedule says that the Secretary of State or the appropriate Minister can effectively close down the investigation process when he is satisfied that enough information is available before making a final decision. There does not seem to be any insurance policy against pernicious abuse.

Iain Wright: I am grateful for that question. It is very similar to what the hon. Gentleman asked in his previous line of inquiry about public rights of way. I would point out that the Secretary of State needs to act reasonably and in accordance with principles of general administrative law that would be subject to judicial review. As for the suggestion that a future Administration might have a less benign approach to these laws, I suggest to him that we need to work together to ensure that we continue to have a Labour Government.

Question put and agreed to.

Schedule 4 agreed to.

Clause 13

Power of Secretary of State to make designation orders

Lembit Öpik: I beg to move amendment No. 98, in clause 13, page 5, line 12, after ‘(a)’, insert ‘subject to social and geographical considerations,’.
The amendment would introduce the words “subject to social and geographical considerations” into subsection (1)(a) so that it read:
“(1) The Secretary of State may by order designate an area in England if the
Secretary of State considers that—
(a) subject to social and geographical considerations, the area is suitable for development”.
The reason for the amendment is that I think that every Member of Parliament has experienced the frustrations of local communities who feel that social and geographical considerations—particularly social ones—have not been taken into account when a development is forced on them. Introducing the requirement for consideration will enable local communities genuinely to feel that their concerns have been heard. It should also be useful to the HCA and to the Secretary of State because, on occasions, that kind of consideration might prevent a social catastrophe or the misuse of ground because geographical considerations have not been taken into account. Had such wording been in place in the past, perhaps we would not have had so much development on flood plains—and we know the consequences of that.
I ask the Minister to provide his views on the benefits of explicitly introducing social and geographical considerations into the deliberations of the Secretary of State when making designation orders.

Iain Wright: I feel as if I am being unduly harsh on the hon. Gentleman today, and I do not mean to be, but I have to say that I was grateful to him for clarifying the amendment because I was at a loss as to what it meant. Largely because of that uncertainty, I do not think that the amendment adds any value to the clause; it would merely serve as the beginning of a list of things—we are back to the list principle that we so enjoyed on Thursday—that the Secretary of State would need to take into account when considering whether to exercise her designation powers under clause 13. We have had many discussions, which I have enjoyed, about the list principle. Placing in the Bill two matters that the Secretary of State would have to take into account before an area could be designated suggests the exclusion of other considerations.
In the context of the Secretary of State’s consideration of whether to designate an area, I would suggest, with the greatest respect to the hon. Gentleman, that a list is pointless. Each area will be set out in a designation order made by the Secretary of State and, in deciding to exercise that power, she will need to be satisfied that designating an area and conferring local planning authority powers on the agency is justified. The Secretary of State’s decision would be open to challenge in the courts, as well as being subject to parliamentary scrutiny. She would need to demonstrate that her decision to designate an area was reasonable.
In conclusion, the amendment is not necessary and adds nothing to the understanding of clause 13. I do apologise to the hon. Gentleman for that wording. I hope that the Committee is content with what I have said, and I invite the hon. Gentleman to withdraw amendment No. 98.

Lembit Öpik: The Minister says that he is perhaps being unduly harsh on me, He only serves to make things more difficult for himself after the next general election when, as I sit in his place, I shall remember his intransigence. But I hope that I shall not pay him in like kind; I shall listen to the merits of his arguments and then reject his amendments all the same, as he is doing with me.
I can see that the Minister is terrified of lists, but there is an irony in that, as has been made clear, because the Government themselves have included lists in this very Bill. So that is nothing more than a moot point in his objection to what I am suggesting. Nevertheless, the Minister gave some reassurance that these things will have to be taken into account, although in a different way. In order not to prolong the debate, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Iain Wright: I beg to move amendment No. 20, in clause 13, page 6, line 14, leave out second ‘and’.

Roger Gale: With this it will be convenient to discuss Government amendment No. 21.

Iain Wright: In keeping with the previous debate and the remarks made by the hon. Member for Montgomeryshire, I too will be short and sweet—I am certainly short. Amendments Nos. 20 and 21 provide for the insertion of a reference to part 8 of the Planning Bill, which is currently being considered just down the corridor.
Part 8 of the Planning Bill makes provision for enforcement of development control where a development is or forms part of a nationally significant infrastructure project. Part 8 gives the local planning authority various functions: right of entry, right to require information, power to serve notice of unauthorised development and power to apply for injunctions to stop continuing breaches of development consent. Amendments Nos. 20 and 21 ensure that, where it is proposed to confer local planning authority functions on the agency in relation to a designated area, that could include functions under part 8.

Grant Shapps: The principle concern about the clause and the amendment is that, essentially, they set up a duplicate local planning authority—under the auspices of the Homes and Communities Agency, with a whole pile of additional powers. The interesting thing to consider is whether this is intended, as we suspect, to railroad through higher numbers of housing developments at a time or in a place where the local community perhaps has perfectly reasonable and legitimate reasons for objecting, such as local hospitals simultaneously closing or services being cut in other ways, or at least not provided in terms of infrastructure. What makes me curious about the clause and the amendments is that the Green Paper alludes to all this.
First, the Green Paper talks about applications being granted on appeal. With the use of the power vested in the HCA under the clause, designation orders could be used, in effect, to ram through the application. Another aspect of the Green Paper—surprisingly not carried through in the Bill, the clause or the amendments—was the suggestion that there would be something of a carrot approach; that funding would be attributed to local authorities that were proactive in creating an over-supply of housing. Yet I do not see any great move towards that here.
Can the Minister reassure us that, in using the designation orders, the powers of the agency will not be used simply to override local authorities and that the local authority will not be usurped by the HCA coming in with greater planning powers than those of the local authority, sometimes against the wishes of the local people, and riding roughshod over local desires? The Minister and I have different views on how to produce the increase in housing that we undoubtedly need in this country, and I think that the clause and the amendments rather describe that difference, which is all about top-down powers. If the local authority is not doing it, then the HCA will, through designation orders. I would be grateful for some reassurance that the intention of the amendments is not further to augment the powers of the HCA.

Robert Syms: I, too, have a few concerns. It is appropriate to try and flesh out what the Government intend. For example, in docklands, I can easily see that there might be a need to go across local authority boundaries, because those boundaries do not always conform to a particular development area. I can also see that under clause 13 the Secretary of State would have to consult, so no doubt we would be aware of the local authority’s views. A moment ago the Minister talked about parliamentary scrutiny, so no doubt there would be an opportunity for us to have some debate or argument about what is proposed.
My first concern is that the agency could end up both as a planning authority and as a developer or involved with development. Local authorities have to wear different hats, and the planning hat is sometimes different to the development hat. Secondly, if a designation order is passed, is it time-limited? While one may have a view about the time in which housing and development need to be produced in a particular area of a city or community, the default position always ought to be that the local authority is the principal planning authority. Is the objective of a designation order to achieve a perceived objective over a period of time with an end, when the powers will automatically be restored to a local borough or authority? It is quite important that that is the case. When powers are conferred, in effect, on a quango, and taken away from a democratic body, there should be some kind of time limitation.
Another concern is that the planning hat does require—sometimes through section 106 agreements or through the Government’s latest proposals—some degree of planning gain in respect of local authorities. With some of these developments, the money no doubt will be going in, rather than a great amount of money being generated. Who would get the section 106 development money? Would it be the Housing Corporation or would there be some means of sharing that money with the borough in which these developments are going up?
In east London for example, some boroughs are not that wealthy. If a particular corporation is allowed to be the planning authority of an area, it would negotiate the section 106 agreements. Who gets the cash? Could it be remitted to the local authority for leisure, recreation or other things, or would the money raised through section 106 agreements or by planning gain be spent specifically within the geographical remit of the designation order? What would happen with any moneys when the designation order ended, if there was an end date? If the particular area designated is across two or three boroughs, what arrangements will be made for some kind of financial sharing? Cash may be generated that is necessary for schooling, leisure, recreation or some other services within that area.
I would really like the Minister to state whether the scheme is time-limited and what happens to any money from planning gain. I am also curious to hear him give some examples of where this might occur. I used the example of the docklands development in east London, where we had the enterprise zones. Could he give some indication of how large this could be, or how small? I have not got a feel for whether we are talking about small areas of several hectares in a key development costing some hundreds of millions of pounds, or quite large areas. I just do not understand what the Government want with this aspect of clause 13.

Lembit Öpik: I suspect, on that last point, that it would be established by precedent, but I would be interested to know what the Minister thinks. For the reasons already described, I ask him what would prevent the use of this power regularly to sidestep troublesome local authorities that are slowing up the policy implementation of national Government—or is that in fact the purpose of this Government amendment?

Iain Wright: I seek your ruling, Mr. Gale, since some of the questions seem to stray towards a clause stand part debate. I would like your guidance on whether that is acceptable.

Roger Gale: I am perfectly happy. It makes eminent sense to me.

Iain Wright: Thank you, Mr Gale. I have been interested in some of the comments, and I do think this is one of the main dividing lines between us and the Opposition. I was very intrigued by what the hon. Member for Welwyn Hatfield said about railroading and riding roughshod over local authorities. I have made it clear time and again that that is simply not our approach. We want to make sure that local authorities are stepping up to the plate. That is the whole purpose of the Homes and Communities Agency. We are absolutely committed to working with and supporting local authorities.

Lembit Öpik: I remind the Minister that although that may not be his approach—I take him at his word on that—that is not how we must test this legislation. How can he be sure that other Governments and other Ministers, who may not take his benign approach towards this issue and who may have a political agenda of their own, will not abuse the legislation that we are introducing, including this specific amendment?

Iain Wright: All that I can do at the moment is look at the facts of what is going on now. For example, more than 70 local authorities have volunteered to work with us on growth in the first round of new growth points, and bids for a second round are now being considered. Taken together with the growth areas, that means that some 200 local authorities—half of all local authorities in England—will be working with us on the growth agenda. The picture that the hon. Member for North-East Bedfordshire paints of local authorities shutting up shop and saying, “We do not want to hear any of this” is simply not borne out by the evidence that we have seen on the ground.
I also reiterate to the Committee that local authorities are very much the repository of skills and expertise, particularly in their own local circumstances. They have the means by which they can regenerate their area; they are best placed to know what their area needs.
In some admittedly rare cases—I imagine that the whole Committee agrees with this—the regeneration challenge that some local authorities face means that they will need additional help and support. That is the purpose of clause 13. In such circumstances, the Homes and Communities Agency will be there to take a more direct role. The agency will play a part in that skills agenda—in ensuring that people have the required skills to step up to the plate and make sure that homes and regeneration development is carried out in their area.
I mentioned earlier—it is a recurring theme of mine—that the new agency has a unique position. It brings together land and investment for the purposes of regenerating and developing areas for the benefit of the wider community. In order to exploit that unique position and the huge potential for development, we need to be able to give the agency direct planning powers wherever appropriate. That is unlikely to happen frequently, and in any case it is not a new concept.
It is also worth pointing out that the agency will have wide powers in relation to regeneration, infrastructure, land acquisition and compulsory purchase; we have mentioned those powers before and discussed them in earlier clause stand part debates. In contrast, planning powers will only ever be granted to the agency on a case-by-case basis and in relation to defined localities. Each area will be set out in a designation order, made by the Secretary of State, so she will need to be satisfied that designating an area where the HCA can operate as the local planning authority, rather than the existing council doing so, is demonstrated and justified.

Grant Shapps: I still seek clarification on this issue, because it seems to me that a local authority could carry out some sort of consultation on, for example, building more homes, decide that—for a variety of reasons, including lack of infrastructure and services—it would be inappropriate in that particular area, and then be overturned by the HCA coming in and simply saying, “Actually, we are not interested in that process. We now have the designation order, which will have those 5,000, 10,000 or 20,000 homes built right there.” Where are the safeguards in this clause to prevent the local community from being overridden?

Iain Wright: The Secretary of State is required to consult all local authorities who have an interest within the area that it is proposed to designate. I suggest that this whole designation issue would be a long way down the process and, as I have said before, I think that it would emerge only in very rare circumstances. That came out in oral evidence sessions in December. The one example—there has been only one—that we have regarding English Partnerships is the Milton Keynes issue. I imagine that this situation will be extremely rare, and there would be a long process. The duty will be taken extremely seriously, because we understand that these are extremely wide powers. Only following consultation with local authorities would the Secretary of State consider whether to designate the area and, crucially, if the area is designated, decide which functions to confer on the agency in relation to that area.

Lembit Öpik: None of the assurances that the Minister has given is anything more than reassuring words. There is nothing specific in what he has said to provide an insurance policy against the persistent use, on a case-by-case basis, of this greater power. Is there anything specific in the legislation, or is he planning anything on Report, that would provide a double lock—a security that is more than simply a hope that Secretaries of State continue to be benign?

Iain Wright: Future Secretaries of State of a non-Labour Government would be able to change the legislation as they saw fit, but that is the case for all legislation. I am happy to work with the hon. Gentleman to make sure that we have a Labour Government indefinitely: that is in the best interests of the country. The argument does not hold up, because a future Secretary of State could override anything in the Bill.
As to reassurances, controls and locks, it would be a long process that would be considered extremely carefully. I reiterate, and I hope it does provide reassurance, that the Secretary of State is required to consult all local authorities that have an interest in the area. Following that consultation, the Secretary of State would consider whether there was a need to designate the area and, if so—this is very important—what functions to confer on the agency in relation to that area. As part of that, there would be a timing issue. The hon. Member for Poole asked whether designation would be time-limited. An example would be Milton Keynes, which is designated until 2016, and I imagine that similar situations would arise.

George Young: I am grateful to the Minister for being as helpful as he can in trying to sketch the circumstances in which these powers might be used. He said that this was unlikely to happen frequently and would happen only on a case-by-case basis. Are there any areas at the moment where he is contemplating using these powers?

Iain Wright: No, there are not. As I have said before, we need to be working in conjunction with local authorities to ensure that they have the skills and expertise—or that they are provided for them by the agency—to make sure that they can express their concerns, and that they the relevant infrastructure and development in order to achieve the ambition to have the relevant number of homes in their area.
To come to a blunt point, I would like Members to consider the opportunity cost of all this. It will involve an enormous amount of time, energy and effort on the part of the HCA. It will not be doing this on an everyday basis, because the opportunity cost of working in other areas will be tremendous. It will have to consider the scope of this measure. Given the massive investment in staffing resources and in making sure that everything is carried out in conjunction with the appropriate legislation, an enormous amount of time will be taken up within the agency, from senior management downwards. It is in the agency’s interests, frankly, to work with local authorities in the spirit of co-operation and partnership, rather than making sure they go down this route. In real-world terms, the opportunity cost issue is incredibly important.
We are not operating in a vacuum. All planning decisions are subject to planning laws and regulations on involvement, consultation and appeals, and national and regional planning policies on decisions. The HCA will not be riding roughshod over planning legislation, but will be operating within the local development framework. The case-by-case basis is the important point I want to push, as well as the opportunity cost. Members have asked the scale on which the designation orders will be given. I still think that this power will be used sparingly, and that there will need to be extremely compelling cases. It is very important that we consider in detail those particular controls. The Secretary of State must consult every local authority that could be within the designated area. We would expect to consult on the area to be designated, and the powers to be conferred on the agency where that power would be used.
Secondly, the designation order must be made by statutory instrument and would be subject to the negative resolution procedure in this House.

Robert Syms: Apart from consulting local authorities where the new planning authority would be, it is important to consult neighbouring authorities because what happens may have a knock-on effect. Someone may consult on an area of land across two east London boroughs, for example, but may not include in that consultation a third borough over the river, which may also be affected and may not wish the project to go ahead. There must be much wider consultation, or investment may be focused in one area while another is neglected.

Iain Wright: I understand the hon. Gentleman’s sentiment. The issue would be dealt with by the provision stating that the Secretary of State would consult local authorities any part of which is included within the designated area. The area to be designated would also be considered as part of the broader concept.
The purpose of designating an area is to drive forward large and complex regeneration or development projects. There would be little point in doing that unless we equipped the agency with the requisite powers to plan for and take forward that development. Clause 14 provides the framework for doing so and we will discuss it later.
I hope that I have reassured hon. Members that the provision will be used sparingly because there will be an opportunity cost in terms of the agency’s resources. Many controls will lie with the Secretary of State and the House in considering matters, including those relating to local authorities and designated areas.

Amendment agreed to.

Amendment made: No. 21, in clause 13, page 6, line 15, at end insert ‘and
(d) Part 8 of the Planning Act 2008,’.—[Mr. Iain Wright.]

Clause 13, as amended, ordered to stand part of the Bill.

Clause 14

The HCA as the local planning authority

Iain Wright: I beg to move amendment No. 22, in clause 14, page 6, line 35, leave out ‘functions’ and insert
‘all relevant functions, or specified relevant functions,’.

Roger Gale: With this it will be convenient to discuss Government amendments Nos. 23 to 29.

Iain Wright: I shall be brief. Amendments Nos. 22 and 27 clarify the drafting. They allow the Bill to make it clear which non-local planning authority functions may be conferred upon the agency under the designation order.
Amendment No. 23 ensures that some non-local planning authority functions may be given to the agency concurrently with the existing body—for example, keeping registers of enforcement notices. Amendments Nos. 24 and 29 highlight the general power later in the Bill that would allow a designation order to a supplementary, incidental and consequential provision.
Amendment No. 25 adds section 330 of the Town and Country Planning Act 1990 to the list of functions that may be conferred upon the agency in relation to a designated area. This function gives local authorities power to require information as to interests in land for the purpose of making any order or issuing or serving any notice or other document under the 1990 Act.
Amendment No. 26 removes section 76 of the Planning (Listed Buildings and Conservation Areas) Act 1990 from the list of functions that may be conferred upon the agency in relation to a designated area. The provision does not actually confer functions on anyone other than the Secretary of State. Amendment No. 28 inserts a new power to amend by order the definition of “planning-related provisions” or “relevant functions”.
As I said, these are technical amendments that clarify matters in the Bill, and if hon. Members are still with me—that is, if they are awake—I ask them to support the amendments.

Grant Shapps: I draw the Minister’s attention to Government amendments Nos. 23 and 27, which are connected. Amendment No. 23 refers to
“the functions concerned instead of, or concurrently with, other persons”.
Will the Minister define who “other persons” are in that context, as it seems to be missing from the description? Government amendment No. 27 might reveal something of the answer, to give him a helping hand. It refers to relevant functions of London borough councils and the common council of the City of London. I suspect that those might be the “other persons” described.
The concern is that these proposals could set the HCA up in direct competition to others, such as the London Development Agency and the Mayor of London. That conflict could take many different forms including direct competition. The end concern is that there could be delay and confusion about who ultimately is responsible. We have good evidence that, when that happens, it causes all kinds of problems. One has to look only as far as the Thames Gateway to see the kind of mess, confusion and delay that can occur when the lines of authority are not clear. Perhaps the Minister could explain those two points. One is about who the “other persons” are in Government amendment No. 23 and the other is about Government amendment No. 27, which seems to set up conflict. Is that a deliberate move? Is that the intention or is it intended that the HCA take on additional powers and ride over the responsibilities of the local authorities?
I note that in Sir Simon Milton’s evidence to the sitting on 11 December he says:
“There is a suspicion on the part of some councils that the view will be that if you do not deliver what the Government tell you to deliver on housing numbers your planning powers will be removed and given to the HCA. That would be completely unacceptable to local government as a whole.”——[Official Report, Housing and Regeneration Public Bill Committee, 11 December 2007; c. 6, Q5.]
In addition to that point, Government amendment No. 27 also raises the question over the powers of the London Development Agency and the Mayor of London, and how they will interact.

Lembit Öpik: Although I do not expect the Minister to repeat the comments that he made in the previous debate, he can surely see that this clause, the previous clause and the associated amendments are connected. It seems to me that Government amendment No. 23 serves to do exactly what the hon. Member for Welwyn Hatfield just highlighted by creating a potential conflict and an opportunity to sidestep the existing processes. I know the Minister’s argument because he made it in the previous discussion. I do not expect him to repeat it, but I put on record my considerable concern that a malicious Minister could easily use this power, with the amendments, to sidestep a local authority and exert the will of Government on it, regardless of the wishes of local people.

Robert Syms: My comments are more general, so do you want me to wait, Mr. Gale?

Roger Gale: It is all right.

Robert Syms: Thank you, Mr. Gale. We now have the HCA as a local planning authority. There will presumably be a local planning committee to undertake that role. Who will be appointed to that planning committee? I am interested to know where the HCA will find its members. There will evidently be local councillors elected within a designated area. Would they be used or people from outside? I would like some indication of who will carry out the functions of the HCA under the clause. When there is a planning committee, I presume that it would be not the main board members who are appointed, but people at a lower level. Under which standards body would they come if they had an interest to declare or if there was the perception of something going wrong? Would it be the local government standards body? I would like more detail.

Iain Wright: I hope that I can clarify things for the hon. Gentleman. With regard to the points made by the hon. Member for Welwyn Hatfield on Government amendments Nos. 23 and 27, my strong feeling is that they work together, are complementary and not in conflict. The persons referred to in Government amendment No. 23 are the bodies listed under the relevant functions within Government amendment No. 27. I hope that that is clear. I do not think that it raises conflict, because Planning Acts impose functions on the local planning authority and other bodies, which are listed in Government amendment No. 27. I have mentioned the importance of the whole planning framework with regard to what the agency does. The intention of the amendment is to clarify which other persons those will be.

Grant Shapps: I want to ensure that we are absolutely clear. Does that mean that Government amendment No. 23 refers to Government amendment No. 27 and the persons are, specifically, the London Development Agency, the Mayor of London and London Councils?

Iain Wright: Yes, that is certainly my impression of the Government amendments and I am more than happy to look to the skies to seek inspiration. If there is anything on which I have misled the Committee, I will certainly let them know in this afternoon’s session. I am looking to the skies, but they are very cloudy today and I cannot see much when I look outside, so I shall come back to that if I may.
The hon. Member for Poole asked some interesting questions about governance and raised an incredibly important point about who would sit on the relevant planning committees. My strong understanding is that board members of the HCA would do so, along with co-opted outside members. They are likely to be local councillors from the relevant areas. We would expect the HCA board to establish suitable arrangements so that the committees can accommodate such instances and address matters such as good governance, good practice and the avoidance of conflict of interest.
Paragraph 9 of schedule 1 provides for instances when employees or members of the committee must disclose the nature of their involvement. The agency will also have the ability to appoint people who are not employees or members and to co-opt such bodies to such committees as they consider appropriate. However, it is important to point out to the hon. Gentleman that they must gain the Secretary of State’s consent in those circumstances, which will help to maintain integrity in all external appointments. I think that it shows the difficulty in this whole issue of planning designation and how extremely rare that will be, and it goes back to the point that I made earlier about opportunity costs and the resources of the agency.
It is still cloudy outside, so I suggest that I need to go and have a look, perhaps in St. James’s park, but I hope to be able to provide clarification to the Committee this afternoon.

Amendment agreed to.

Amendments made: No. 23, in clause 14, page 6, line 40, after ‘(3)’ insert ‘—
(a) may provide for the HCA to have the functions concerned instead of, or concurrently with, other persons who have them,
(b) ’.
No. 24, in clause 14, page 6, line 43, after ‘(5)’ insert 
‘, or section 274(1)(d) in its application to an order of a kind falling within this section,’.
No. 25, in clause 14, page 7, line 3, leave out ‘section 188’ and insert ‘sections 188 and 330’.
No. 26, in clause 14, page 7, line 5, leave out ‘, 55 and 76’ and insert ‘and 55’.
No. 27, in clause 14, page 7, line 8, at end insert—
‘“relevant functions” means functions of—
(a) a district council, a London borough council, the Common Council of the City of London, or any other body which is a local authority within the meaning of the Town and Country Planning Act 1990 (c. 8),
(b) a district planning authority (within the meaning of that Act), or
(c) a hazardous substances authority (within the meaning of the Planning (Hazardous Substances) Act 1990 (c. 10)),’.—[Mr. Wright.]

Roger Gale: Before we move to amendment No. 2, in the light of the previous debate, I shall ask the Clerk to indicate to Mr. Benton that it is unlikely that it will be necessary to have a stand part debate on that clause. I inform the Committee of that now in case hon. Members wish to take advantage of an opportunity to raise other issues arising from the clause.

Amendment proposed: No. 2, in clause 14, page 7, line 10, at end add—
‘(8) Before exercising its powers under this section the HCA shall undertake formal consultation with the local authority and organise public information and consultation meetings with local community organisations and local people, in respect of any development in the designated area.’. —[Grant Shapps.]

Grant Shapps: The amendment is very much along the lines of some of the issues that were raised this morning, particularly in relation to clause 13, and relates to the extent to which the HCA will have to consult with local authorities. We have heard what could be described as a lot of warm words from the Minister about how the HCA, under the Government’s leadership, would widely consult on a whole variety of matters.
There is a concern, however, certainly on this side of the Committee, that that is not written on the face of the Bill to the extent that it should be. The amendment intends to rectify that problem by ensuring that some formal consultation must take place before the HCA acts. Again, that must be seen in the context of a powerful new agency that has functions right across the piece. Not only is it the planner, it can now effectively be the landowner, and we will find out later in the Bill that it can be expected to be the operator.
Debate adjourned.—[Liz Blackman.]

Adjourned accordingly at One o’clock, till this day at Four o’clock.